A/E/P Consulting

Incentive Compensation Plans

Incentive compensation plans are an essential mechanism for properly compensating the principals and key employees in design firms. These plans analyze the key elements of a firm’s success and translate those elements into a means of compensating owners throughout the year and with year-end bonuses based on the overall financial performance of the firm. Incentive compensation plans are critical to attracting and retaining key employees and owners and are also an integral part of a firm’s strategic long-term plan for ownership transition.

How does your firm carve up the pie at the end of the year? Are discretionary profits distributed solely based on stock ownership? Does the firm’s plan provide for a return on investment? How does your firm account for project management, marketing, chargeable hours and firm administration? Are the principal’s base salaries in line with industry standards or are they over- or under-compensated?

The principals at Dannible/McKee and Associates, Ltd. can provide insight into solving these issues with respect to your firm’s compensation structure. As part of a firm’s strategic ownership transition plan or as a separate engagement, we can provide an objective evaluation of your firm’s compensation structure and provide for unique alternatives to provide incentive for the firm’s owners to continue to grow the firm and increase profitability. We can offer insight as to the current trends and techniques used throughout the design profession to compensate owners of professional practices.

From Our Clients

My father started the business in 1948, and had built a reputable business over the years. Several of our employees, including myself had been working with him for 20 - 25 years. So, we had many concerns about the future of the firm, and wished to carry out the legacy he had started. We certainly did not want it to dissolve upon his retirement. We attended a seminar regarding the valuation of design firms and ownership transition put on by Dannible/McKee and Associates. Their approach to our needs made sense and simplified what could have been a very complicated transition for all involved in our firm. It was a great pleasure working with such a professional team and one I would recommend.